begin withdrawals from a 72T
L1: begin withdrawals from a 72TI’m 51 and took early retirement from my job. I want to begin withdrawals from my IRA. I want to get my first payment Nov 1 2010,my planner says I can’t start in Nov 2010 or I have to take the whole years distribution. I hope he’s wrong, I need the money! As it stands now, I’ll receive my first payment Jan. 1 2011. Can anyone help me out?2010-10-18 12:54, By: Pmd327, IP: [184.108.40.206]
L2: begin withdrawals from a 72TLet’s start with… get a new planner, someone that understands what a SEPP plan is and how it operates.
You can start on November 1 and for 2010, you can take out the full amount or you could take out only 2/12s of the annual distribution. In 2011 you would take the full annual distribution as you need it as long as by 12/31/2011 you have taken the full annual distribution.
Check out our Planning Pointers page for additional tips:http://72t.net/72t/Planning/Pointers2010-10-18 13:14, By: Gfw, IP: [220.127.116.11]
L3: begin withdrawals from a 72TI am a planner who has been doing SEPP Plans since 1994. I agree with GFW that you should seek out a new planner, after reading the notes for which he provided the link.
If your IRA is “in place” with your current planner / custodian, then starting by Nov 1st should be no problem. Simply complete the paperwork and have it faxed to the custodian so they can set things up. However, I recommend changing the distribution date from the first day of the month to the seventh. By doing this you avoid the holiday / weekend problem, and it still gives you enough time to correct any botched distributionsduring anyDecember.
If your IRA is not with your current planner or you are going to find a new planner, then from a practical stand point, you probably could not start the first distribution by November 1. It takes time to transfer funds from one IRA account to another IRA account. So let’s assume you do transfer to a new planner and custodian today or tomorrow. You probably could begin distributions in November but not by the 1st but say, for example, the 29th. OK so your start date is delayed slightly. Once established you can easily change the next distribution date to December 7th and continue to receive your monthly distribution on the 7th or first business date after the 7th of the month.
Like GFW said, you could take either 12-months or 2-months worth of distributions this year. After that you are free to change the distribution frequency to whatever works for you.
Jim2010-10-18 14:26, By: Jim, IP: [18.104.22.168]
L4: begin withdrawals from a 72TIn addition, note that your SEPP plan starts in the month your first distribution is made, not the month you receive that distribution. Therefore, any distribution that you receive on the first was probably distributed in the prior month. As Jim suggested, if you set up the distribution for the 7th of the month, you would probably receive it around the 10th of the month, and there would be no question what month your plan began OR how many months of distributions you needed to take if you elected to pro rate the annual amount by the month.
If you needed the funds by the 7th, you might set up the distribution with the custodian on the 3rd or 4th or the next business day if those dates were on a weekend.2010-10-18 17:59, By: Alan S., IP: [22.214.171.124]